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Body and Mind
Body and Mind May 16, 2017

VANCOUVER, BC, May 16, 2017 – Deploy Technologies Inc. (CSE: DEP, OTC: DPLY) (“Deploy” or the “Company”) is pleased to announce that it has entered into an assignment and novation agreement (the “Assignment Agreement”) with Toro Pacific Management Inc. (the “Transferor”) pursuant to which the Transferor assigned a letter of intent (the “LOI”) effective May 12, 2017 to Deploy in accordance with its terms. The Assignment Agreement and LOI contemplate a business combination transaction (the “Acquisition”) pursuant to which Deploy will acquire all of the issued and outstanding securities of Nevada Medical Group LLC (“NMG”), an arm’s-length Nevada-based licensed producer of medical marijuana and owner of the Body & Mind brand (“BaM”).

As consideration for the Assignment Agreement, Deploy will issue to the Transferor 1,000,000 common shares in the capital of Deploy (the “Deploy Shares”), on a post-Consolidation basis (as defined below), at a deemed price of $0.66 per Deploy Share. In addition, the Company has paid two finders a total of

$63,750 for their services in identifying and introducing the Company to potential companies for a business combination, culminating in the Company’s identification of NMG as a target.

In connection with the assignment of the LOI, Deploy will pay a deposit of US$50,000 to NMG, which is refundable in the event a condition precedent to Closing (as defined below) is not fulfilled or waived, and is further to be created against the cash purchase price at Closing.

The Acquisition is expected to represent a “fundamental change” as that term is defined in the policies of the Canadian Securities Exchange (the “Exchange”), and be structured as a reverse takeover. The members of NMG (the “NMG Members”) will receive an aggregate of 16,000,000 post-Consolidation Deploy Shares at a deemed price of $0.66 per Deploy Share in exchange for their interests in NMG.

Upon successful completion of the Acquisition, it is anticipated that the Company will retain its listing on the Exchange as a producer of medical marijuana.

“We believe the acquisition of BaM is the conservative way of playing the anticipated growth in the Las Vegas recreational cannabis market, a market that many believe will be among the largest in the world starting July of this year”, commented Mr. Len Clough of Toro Pacific Management. “Not only has BaM achieved recognition as Weedmaps #1 Nevada brand, BaM is operating near break-even cash flow and any expansion initiatives are expected to produce meaningful economies of scale. BaM has identified multiple acquisition candidates that would assist it in growing Nevada market share and earnings at opportunistic valuations. We look forward to working with NMG’s management team and leveraging the BaM franchise, not only in Nevada but throughout other States via application.”

Nevada Medical Group LLC

NMG was an early applicant in Nevada in 2014 and was awarded one of the first state medical licences for both cultivation and production. NMG operates under its marquee brand name of Body & Mind Inc. (“BaM”) and produces flower, oil extracts and edibles and are available for sale in approximately 70% of the dispensaries in Nevada. BaM is an innovation leader and its products have received multiple awards including the coveted #1 ranking on Weedmaps for the state of Nevada.

The company has near term plans to expand to 50,000 square feet as the current facility of approximately 20,000 square feet is nearing capacity. NMG anticipates an increase in demand due to the recently approved “Adult Use” licensing in the State of Nevada set to begin in July 2017. BaM has several growth initiatives underway including new product introductions, product licensing, third party extraction, out-of- State licencing, and acquisitions.

The Acquisition

The LOI sets out certain terms and conditions pursuant to which the proposed Acquisition will be completed. The Acquisition is subject to the parties successfully entering into a definitive business combination agreement (the “Definitive Agreement”) in respect of the Acquisition on or before August 31, 2017, or such other date as Deploy and NMG may mutually agree.

The LOI also contemplates other material conditions precedent to the closing of the Acquisition (the “Closing”), including, the completion of an equity financing to raise minimum gross proceeds of US$4,000,000 (the “Concurrent Financing”), customary due diligence, receipt of all necessary regulatory, corporate and third party approvals, compliance with all applicable regulatory requirements, and all requisite board and shareholder approvals being obtained. In particular, it is a condition of  Closing that Deploy obtain prior approval of the Nevada Department of Health and Human Services Division of Public and Behavioral Health, and if necessary, the approval of Clark County, Nevada, in relation to the transfer of the NMG membership interests.

It is anticipated that the completion of the Acquisition will involve, among other things, the following steps, but the parties may agree to a different structure based on tax efficiencies and the advice from legal and financial advisors:

  • the consolidation of the common shares in the capital of Deploy on a 1 new for 3 old basis (the “Consolidation”), subject to all required approvals including shareholder approval, if applicable;
  • following completion of the Consolidation, the issuance by Deploy of 16,000,000 Deploy Shares to the NMG Members in exchange for all of the outstanding membership interests, such that NMG will become a wholly-owned subsidiary of the Company;
  • the 16,000,000 Deploy Shares issuable to NMG Members being subject to a voluntary pool, vesting over 24 months, with 1/10 released 6 months from the date of Closing, 1/5 released 12 months from the date of Closing, 1/4 released 18 months from the date of Closing, and the remaining Deploy Shares released 24 months from the date of Closing;
  • Deploy assuming loans payable to TI Nevada, LLC, an NMG member, in the amount of US$400,000, with US$225,000 payable on Closing, and the remaining US$175,000 to be paid within 15 months from the date of Closing;
  • Deploy repaying NMG, or any paying NMG Member, for expenditures prior to the date of Closing related to the acquisition of production equipment, with such expenditures to not exceed US$64,000;
  • Deploy paying US$2,000,000 in cash to the NMG Members as at the date of Closing;
  • Deploy delivering a non-interest bearing promissory note to the NMG Members in the amount of US$2,000,000, secured by a senior priority security interest in all assets of Deploy, to be paid at the earlier of 15 months from the date of Closing or, if an equity or debt financing subsequent to the Concurrent Financing is closed in an aggregate amount of not less than US$5,000,000, then within 30 days of the closing date of such subsequent financing;
  • completion of the Concurrent Financing; and
  • receipt of all director, shareholder and regulatory approvals relating to the Acquisition and the Concurrent Financing, including, without limitation, the approval of the Exchange.

Certain of the Deploy Shares issuable pursuant to the Acquisition may be subject to the escrow requirements of the Exchange and hold periods as required by applicable securities laws.

Current Share Structure

The Company currently has 57,412,974 common shares (19,137,658 post-Consolidation common shares) issued and outstanding and nil preferred shares issued and outstanding.

Concurrent Financing

The Concurrent Financing will be completed on a pre-Consolidation basis and consist of units of Deploy (the “Units”), at an issue price of $0.22 per Unit, with each Unit consisting of one Deploy Share and one Deploy Share purchase warrant (the “Warrant”) exercisable at a price of $0.30 for a period of 24 months from the date of issuance. Each Warrant is subject to acceleration provisions following the six-month anniversary of the date of Closing, if the closing trading price of the Deploy Shares on the Exchange is equal to or greater than $0.40 for seven consecutive trading days, at which time the Company may accelerate the expiry date of the Warrants by issuing a press release announcing the reduced warrant term whereupon the Warrants will expire 21 calendar days after the date of such press release.

Pursuant to the terms of the LOI, the Concurrent Financing must raise a minimum of US$4,000,000. The Company intends to issue up to 45,454,545 Units for maximum gross proceeds of $10,000,000 in connection with the Concurrent Financing.

The Concurrent Financing will be completed on a non-brokered basis, and the Company may pay finder’s fees in accordance with applicable securities laws and Exchange policies to eligible finders. Completion of the Concurrent Financing is subject to receipt of Exchange approval and other requisite approvals. All securities issued in connection with the Concurrent Financing will be subject to hold periods under applicable Canadian and United States securities laws for a minimum of four months and a day

Murray Simser, President of Deploy comments, “We are very pleased to have identified a transaction with the caliber of people involved, not just from BaM but several prominent individuals from the financial community as well.”

The securities referenced herein have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registrations or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Board of Directors

In connection with the Acquisition, it is anticipated that the current board of directors and management of Deploy, with the exception of the Company’s Chief Financial Officer, Darren Tindale, will resign and be replaced with the following individuals. In addition, and in consultation with NMG, the Company anticipates adding additional members to the board of directors prior to Closing and pursuant to the terms of the Definitive Agreement. Deploy will also undertake to formally establish an Advisory Board with individuals who have industry and finance expertise.

Robert Hasman (CEO & President of NMG) – Director

Robert Hasman is the founder & CEO of NMG and is responsible for overseeing all operations in Nevada. He has over 15 years experience in real estate, business development and management and is a graduate of Ohio State University. He brings direct knowledge of growing, facility design, daily operations, brand development, compliance, construction, and managing large scale cultivation facilities.

Kevin Hooks (Co-Founder of NMG) – Director

Kevin Hooks is the Co-Founder of NMG & President of all Nevada operations. He is a licensed pharmacist, and was founder and CEO of a pharmacy benefit management company that eventually sold in 2012 for US$4.4 billion. He graduated from the University of Toledo, School of Pharmacy. He brings extensive pharmaceutical expertise along with first-hand knowledge of running large scale businesses and is ideally suited to provide NMG with guidance for its acquisition strategy.

Leonard Clough – CEO, President & Director

Leonard Clough has been involved in capital markets for more than 20 years. He first began his career at RBC Dominion Securities Inc., where he spent 13 years. He then founded Kingfisher Advisors SA, an investment management company formed to manage a registered Cayman Islands mutual fund specializing in special situations and mining. Mr. Clough is currently the President of Toro Pacific Management Inc., a diversified holding company and serves as a director of Dynasty Metals & Mining Inc. (TSXV: DMM, OTCQX: DMMIF).

Disclosure and Caution

Further details about the proposed Acquisition and the Concurrent Financing will be provided in a comprehensive press release when the parties enter into the Definitive Agreement and in the disclosure document to be prepared and filed in respect of the Acquisition. Investors are cautioned that, except as disclosed in the disclosure document, any information released or received with respect to the Acquisition may not be accurate or complete and should not be relied upon.

All information provided in this press release relating to NMG has been provided by management of NMG and has not been independently verified by management of the Company. As the date of this press release, the Company has not completed the Definitive Agreement and readers are cautioned that there can be no assurances that the Definitive Agreement will be executed, or that the Acquisition will be completed.

For further information please contact:

Justin Rasekh

Email: justin@altuscapital.ca

Completion of the proposed transaction is subject to a number of conditions, including receipt of appropriate regulatory approvals. The transaction cannot close until all such conditions are satisfied. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the disclosure document to be prepared in connection with the transaction, any information released or received with respect to the Acquisition may not be accurate or complete and should not be relied upon. Trading in securities of Deploy Technologies Inc. should be considered highly speculative.

This news release contains forward-looking information, which involves known and unknown risks, uncertainties and other factors that may cause actual events to differ materially from current expectations. Important factors – including the availability of funds, the results of financing efforts and the parties’ due diligence reviews, and general market conditions – that could cause actual results to differ materially from the Company’s expectations are disclosed in the Company’s documents filed from time to time on SEDAR (see www.sedar.com). Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The company disclaims any intention or obligation, except to the extent required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

We seek safe harbour.

Body and Mind
Body and Mind May 16, 2017

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